Fraser and Neave’s revenue plunges 11% to $1.4b in 1Q12

As the unprecedented flooding in Thailand has caused the group to halt its dairy operations in Rojana.

According to a financial statement, Fraser and Neave, Limited achieved revenue of $1.36 billion in the first quarter ended 31 December 2011, a decline of 11 per cent over the same period last year. Profit before interest and taxation declined 1 per cent to $286 million.

This quarter’s exceptional gains of $29 million included an $18-million gain from the divestment of the Group’s 29.5-per cent stake in China Dairy Group Ltd, and a $6-million provisional excess of insurance claim relating to the Rojana dairy plant flood damage.

Notwithstanding these gains, profit after taxation was down 21 per cent to $241 million due mainly to the absence of $100 million exceptional gain from the completion of corporate and debt restructuring of the Group’s UK property business recorded last year. Excluding exceptional items, PAT improved 4 per cent to $212 million.

Supported by the strength of its brands across multiple geographies, Beer continued to see strong revenue and profit growth in 1Q2012. Buoyed by strong topline gains particularly in its key markets namely Vietnam, Indonesia, Papua New Guinea and Myanmar, and the acquisition of Solomon Breweries last year, Beer earnings soared 30 per cent to $159 million.

In Dairies, Thailand’s unprecedented flooding in October and November 2011 temporarily halted the Group’s Thai dairy operations in Rojana. Cleanup and flood recovery works commenced in December 2011, as soon as the Group regained access to its Rojana dairy plant. The Group expects the plant to return to operations, in stages, by March 2012, and resume full-scale production of all products by May 2012.

In Malaysia, profitability of Dairies continued to be adversely affected by the removal of sugar subsidy for selected Food & Beverage manufacturers. However, despite the challenging environment, overall Dairies posted a profit of $2 million, versus $14 million in the last corresponding period. Excluding earnings impact from Thailand, PBIT improved 14 per cent to $6 million.

Earnings from Properties continued to be supported by pre-sold development projects. Despite a 34 per cent decline in revenue, PBIT dropped 9 per cent to $88 million due to the absence of impairment charges from development projects, as well as better performance from Commercial Property. In compliance with INT FRS 115, the Group applies completed contract accounting method to recognise revenue and income on overseas development projects as well as executive condominium development projects and units sold on deferred payment terms in Singapore.

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